(c) What Margaret has produced
70The proceedings have progressed since they first came into the Duty List. Margaret has now produced many documents in her possession. It is not necessary in these reasons to make findings about the respective responsibility of the parties for non-production of material requested before the proceedings commenced. Such findings may perhaps be relevant to questions of costs. All that should perhaps be observed now is that before hearing both parties engaged directly and through lawyers in at times terse correspondence on the question of production.
71Margaret's evidence is, and I accept, that she did not commence to exercise functions under the powers of attorney until about December 2010, even though they were first given in November 2009. Her administration of the powers of attorney as her parents' attorney and her later production of documents have resulted in her advancing a number of different general explanations in answer to Susan's claim. These general explanations appear in the following paragraphs. Then more detail is provided in relation to individual documents.
72General Explanations. Many of the documents Margaret produced give wholly satisfactory evidence of her transactions on behalf of her principals. The documents produced include bank statements that show Margaret has undertaken some electronic banking for George and Gwenda after the powers of attorney commenced. These bank statements are a record of the transactions on George and Gwenda's bank accounts, showing where the funds have gone and the amount of each transaction. But some bank statements are missing, a matter addressed thoroughly in Margaret's evidence and made the subject of findings below. With Margaret's explanations the bank statements produced are an adequate record of Margaret's banking transactions for George and Gwenda during the operation of the powers of attorney.
73Nor has Margaret denied Susan access to George and Gwenda's bank accounts. I accept Margaret's evidence that once she had her own electronic access to their bank accounts that she offered parallel electronic access to these accounts to Susan. I accept that Margaret had a conversation with Susan in which she explained to Susan that she had electronic banking access to George and Gwenda's accounts; and suggested to Susan that Susan set up her own similar electronic access to these accounts. I do not accept that Susan has encountered any obstacle to obtaining the electronic access to George and Gwenda's bank accounts.
74Given the several nature of the power conferred by George and Gwenda's powers of attorney on their two attorneys such independent bank account access for Susan was legally permissible and appropriate. From the United Kingdom Susan could access the accounts over the internet, using the relevant banking access codes. I accept Margaret's evidence that she informed Susan of her right to have this form of banking access. But Susan has not taken up all the powers available to her to obtain her own independent access to the bank material that has been offered to her.
75Susan can fill much of the accounting gap that she complains of, herself. As is explained later in these reasons, these powers of attorney confer both joint and several powers to act on Susan and Margaret. If Susan wishes to have trustee standard financial accounts prepared she could do so using the banking information to which she already has access, using her electronic access codes and using information from George and Gwenda. Leaving aside the question of funding the preparation of those accounts, it would be possible for her under her several powers conferred under the powers of attorney to engage an accountant for that purpose.
76Some of the material that Margaret has produced relates to George and Gwenda's personal financial transactions at times before Susan and Margaret were appointed as attorneys. Some of the material Susan has asked for relates to this early period. For example the correspondence shows that Susan has sought information about the repayment of a loan of $300,000 said to have been made by George and Gwenda to Margaret in 1998: letter from McGlynn and partners to E & A Lawyers 2 May 2012 (Category 7). Neither Margaret nor Susan has to account either to George or Gwenda in respect of transactions before the powers of attorney were created. These are not transactions entered into by the attorney on the principal's behalf: Bowstead and Reynolds on Agency, Thomson Sweet and Maxwell, 18th Edition, London, [6-090]
77In similar vein Susan has sought information about Margaret and her husband's purchase of George and Gwenda's home in Clareville (Category 8). Margaret has explained in her evidence, and I accept, that in discussions with her parents she and her husband purchased her parents' Clareville property in 2007. Margaret and her husband sold another property of their own the same year to fund this purchase and about the same time assisted George and Gwenda to purchase the unit in the same suburb. These transactions all took place well before the subject powers of attorney were created. Margaret has no obligation to account under the powers of attorney to Susan in respect of these transactions.
78Some of the information and documents that Susan has requested have not been produced. This is often because transactions Susan suspects to have taken place have not occurred. For example, I accept Margaret's evidence that there has been no transaction involving shares in George and Gwenda's share portfolio since the powers of attorney were executed (category 6). Margaret says that no such transaction has taken place. Mr Lee does not suggest in his report of 16 October 2012 that any share transactions have been undertaken between 2008 and 2012. Another explanation for non-production is that some of the material requested is in fact Susan's own. This is the case with one of the bank accounts.
79After considering Margaret's general explanations of response, it is now necessary to examine in a little more detail Susan's particular requests for information and Margaret's responses. In doing so the Court does not identify particular bank accounts, share or property in information using bank account numbers, holder identification numbers, or certificate of title numbers. This is to reduce the risk of identity theft from the publication of this judgment on the internet. Some of the eight categories of documents Susan requested in her motion of 3 October 2012 have been discussed and do not need further explanation.
80Moreover the Court does not have to now consider the detail of every request that Susan has made. This is for two reasons. First, as is explained below under the heading "Exercise of the Discretions - Powers of Attorney Act, s 36", on an application for s 36 review such as this the Court must first exercise a discretion under Powers of Attorney Act, s 36(1) to decide whether or not to conduct a s 36 review. In my view the Court does not have to conduct a full review of all documents associated with the operation of the subject power of attorney to do this. Something short of a full review must be able to justify the exercise of the s 36(1) discretion as to whether or not the Court should conduct a full s 36 review. In the circumstances of this case the Court can glean sufficient information to exercise the s 36(1) discretion by undertaking a general survey of what Margaret has produced.
81Secondly, such an approach is especially justifiable where the principals George and Gwenda have instructed counsel to oppose the application for review and nothing has emerged from the general survey which indicates any maladministration on Susan's part as her parents' attorney.
82Particular requests and responses. On 5 October 2012 Margaret replied to Susan's 3 October 2012 requests for information by affidavit and by production of documents. Margaret has made clear in her evidence, which I accept, that there are no books of account and management accounts concerning George and Gwenda's day-to-day affairs (category 1). I also accept that there are no electronic data files, such as for example Excel spreadsheets, containing George and Gwenda's ledgers and cashbooks (Category 2). Neither George nor Gwenda have maintained such records. But this has not prevented George and Gwenda from instructing an accountant, with Margaret's assistance, to prepare their tax returns for the last few years. The documents Margaret produced included George and Gwenda's tax returns for several years,(Category 3) with the exception of the most recent 2012 tax return, which at the time of production of documents had not yet been completed. Although Mr Lee commented that there appeared to be incomplete and insufficient information to support some of the tax returns his report confirms that the recent tax returns were done. He could only detect one error in Gwenda's 2009 tax return.
83Susan also sought correspondence between Margaret and George and Gwenda relating to the conduct of their financial affairs (Category 4). Although there would undoubtedly have been some correspondence, if only between lawyers, in relation to the 2007 conveyancing transactions between George and Gwenda on the one part and Margaret and her husband on the other about the Clareville properties, this material preceded the powers of attorney and does not have to be produced in these proceedings. In relation to documents created after the powers of attorney were executed in 2009, Margaret says there is nothing to produce in this category, which I also accept.
84To the extent that Susan sought Margaret's correspondence on behalf of George and Gwenda with government departments and aged care facilities after execution of the powers of attorney (Category 5) I accept that this material has now been made available for inspection.
85Thus the remaining area of contest between the parties was about the adequacy of banking records kept in relation to George and Gwenda's affairs (Category 6). Susan's solicitors supplied all the materials that Margaret produced to Mr Michael Lee, the accounting expert, for his analysis. On 9 October 2012 Susan's solicitors, McGlynn & Partners (Mr Farago) sent a letter to Mr Lee asking the following questions:-
"1. What are/were the assets of Mr and Mrs Higgins and the value of those assets?"
2. What are/were the liabilities of Mr and Mrs Higgins:
(a) in each of the financial years 2008-2011?
(b) at 30 June 2012?
(c) At the date of your report.
3. What were the annual expenses (by category) of Mr and Mrs Higgins:
(a) in each of the financial years 2008-2011?
(b) at 30 June 2012?
(c) at the date of your report.
4. With respect to the tax returns of Mr and Mrs Higgins for each of the financial years 2008- 2011:
(a) What are the sources of income of Mr and Mrs Higgins disclosed in those tax returns?
(b) With respect to interest received from on cash on deposit:
(i) what are the accounts from which Mr and Mrs Higgins earned interest in each of those years?
(ii) Are the bank statements banking records for each of those accounts to be found in 'Exhibit MH2'? If not, what documents are missing?
(c) With respect to interest received from dividends invested in shares in public or private companies:
(i) what companies paid dividends to Mr and Mrs Higgins in each of those years?
(ii) Does 'Exhibit MH2' contain share scrip, holding statements, dividend statements for each of these companies and the dividends paid by them? If not, what documents are missing?
(d) What primary documents and information would the tax agent have required to prepare those tax returns?
(e) Are there any documents, or categories of documents, which were necessary for the preparation of the 2008-2011 tax returns, and which are not present amongst the documents in the defendant solicitors office ('Exhibit MH2').
5. Do any of the documents in Exhibit 'MH2' disclose the existence of other documents which have not been produced by the defendant? If so, what documents or categories of documents are missing? (We have enclosed some of the documents in MH2 but only a small part of them)."
"As a general observation with all my bank accounts I elect not to receive paper."
86It can be seen from this request that much of what Mr Lee was asked to do was preliminary to attempting to reconstruct the whole of George and Gwenda's financial affairs with a view to preparing trustee standard accounts. As indicated that is not obligation that Margaret bears. Mr Lee efficiently examined the materials produced and reported his findings in a report dated 16 October 2012, which was annexed to his affidavit in the proceedings. Mr Lee's report recorded his findings with respect to banking information and non-banking information. He identified some deficiencies in the documents produced. Margaret then attempted to deal with those claimed deficiencies in her affidavit of 18 October 2012.
87With respect to Mr Lee's findings about non-banking information, he did not suggest any information available to him indicated that Susan had been engaged in unauthorised transactions or transactions contrary to her parents' best interests. He was able to make findings about the Clareville conveyancing transactions and the current arrangements for George and Gwenda's accommodation in the aged care facility. But many of his findings relate to the period before execution of the powers of attorney. He observed that George and Gwenda's unit at Avalon appeared to be untenanted. But Margaret has explained in evidence that this unit was left this way after George and Gwenda entered the aged care facility, in order to keep open for them the possibility, and indeed the hope, that they may perhaps one day return to live in this unit. Mr Lee's most negative findings about non-banking information related to missing or incomplete records, especially with respect to George and Gwenda's day to day recurrent living expenses, such as medical expenses, home unit levies, insurance, maintenance, rates, car registration and the like. But Margaret has supplied more information about many of these matters in her final affidavit evidence. And it difficult to be overly critical of her account when she replied on 18 October to Mr Lee's report of 16 October for a hearing on 19 October. Whilst this material does not immediately satisfy the Court that Margaret would be in a position to account to her principals about all her expenditure in these categories, she has shown herself astute in following up discrepancies in transactions on her parents accounts. I am satisfied that under less time pressure she is likely to be able to give a proper account of the remaining deficiencies in this area.
88Among the issues Mr Lee raised were questions about the extent of Margaret's production of banking information. It is possible to make findings about the major issues relating to these bank accounts. This is done in the following paragraphs. Only the last three digits of the respective bank account numbers are used to identify and separate the accounts.
89NAB Account 026. Mr Lee says that account materials for this account are missing, although interest for it has been disclosed in tax returns over several years. Margaret's answer is that she has no knowledge of this account, and that as at 18 October 2012 her searches had not located any bank statements for the account. Mr Hancock points to the tax returns that show transactions may have during Margaret's operation of these powers of attorney. But as Mr Muddle SC has explained in submissions, the fact that money appears in George and Gwenda's tax returns in respect of that account, does not necessarily mean that Margaret has herself been undertaking transactions on the account. It is probable that some interest earned on this account may have been automatically credited to the account and included, through George and Gwenda's accountants, in the tax returns. I accept Margaret's evidence she does not know anything about this account. The material does not contradict her evidence in this respect. She has given an account of her knowledge of this account that in my view the Court need not examine any further.
90Account 223. This account has a recent gap in its available bank statements. I accept Margaret's evidence that she has provided all paper bank statements for this account in her possession up to 11 August 2011. This account in Gwenda's name has been inactive since 11 August 2011. Margaret rendered this account inactive due to some unauthorised transactions by a non-party to these proceedings. The last bank statement in Exhibit MH2 shows a balance of $0.00 as at August 2011. This account is now closed.
91Account 613. The next account in issue was 613. This account records transactions prior to the appointment of Margaret and Susan as attorneys. Margaret says that she has provided all paper bank statements in her possession dating back to 27 April 2009. I accept that all account statements in respect of this account have been produced. But this account held in Gwenda's name has been non-active since 26 May 2011. Margaret says, and I accept, that she also had to render this account inactive due to certain unauthorised transactions by a non-party to these proceedings. The last bank statement in Exhibit MH2 shows a balance of $0.22 as at January 2012 and the account is now closed. It does not require further examination.
92Account 798. This account 798 is a term deposit. Susan does not clearly assert that statements for this account are missing. According to Margaret's evidence, which I accept, there are no bank statements for this account. In any event Mr Lee seems to accept that Margaret's explanation about account 798 may be correct.
93Account 748. The next bank account the subject of Susan's enquiry is account 748. Susan claims that the bank statements for this account from 2 June 2011 to 30 July 2011 and then from 3 September 2011 to date are missing. I accept Margaret's evidence that this account has been closed for some time, again due to unauthorised transactions by a person not a party to these proceedings. I also accept Margaret's evidence that this account can no longer be accessed online, because it is closed.
94Other accounts, 488, 722, 689 and 989. Susan enquires about a series of other bank accounts - 488, 722, 689, 989. These accounts were also the subject of Mr Lee's evidence. But the gaps in bank statements for these accounts are explained the same way as for the other earlier accounts, those already discussed in that: (1) they either record transactions that precede execution of the powers of attorney; (2) enquiries about them have been resolved to Mr Lee's satisfaction; (3) they are not accounts on which Margaret has undertaken any transactions; or, (4) they do not indicate any accounting deficiency.
95Exhibit MH 2A. Margaret produced several boxes of records in response to Susan's requests. Samples of this produced material were marked as Exhibit MH 2A. Margaret's counsel invited the Court to examine Exhibit MH 2A to form a view about the quality of the record keeping it demonstrated. The Court did that.
96The material in Exhibit MH 2A was certainly not a self-contained set of trustee standard financial accounts. It did not purport to be that. But it was a fairly well ordered set of records of banking and other financial transactions. It comprised a filed, indexed and organised collection of financial material that a financially competent person would be expected to gather in the conduct of his or her own affairs. It is rationally put together, so that one can find bank statements, records of expenditure, asset valuations and title documents. Financial transactions are classified in a logical way by subject and then within each subject by the chronological order of the transactions. Taken as a whole exhibit MH 2A allows George and Gwenda's financial affairs for the period in question to be fairly readily understood.